KARACHI: The foreign investment in the first eight months of this fiscal year jumped 512.9 per cent to $3.336 billion from $650.6 million in the same period last year, showed data released by the State Bank of Pakistan (SBP) on Monday.

The sharp increase in the total investment came following the $2.161bn foreign investment in the country’s debt papers. Pakistan’s treasury bills and investment bonds have been the pick of foreign investors since the outset of this fiscal year amid high interest rates offering lucrative carry trade opportunities.

However, with mounting currency pressures amid outflows from the emerging markets across the globe in the wake of coronavirus shutdown, investors pulled out $606m from Market Treasury Bills and Pakistan Investment Bonds during the ongoing month.

In addition, the foreign direct investment (FDI) during the July-February of FY20 jumped 75pc to $1.852bn from $1.05bn in the corresponding period last fiscal year. In absolute terms, the FDI increased by $793.7m during the first eight months of this fiscal year.

The FDI rose to $562.6m in February compared to $115.8m in the corresponding month of last year.

Major chunk of the FDI came from China, Norway, Malta and Hong Kong at $696.5m, $288.5m, $148.2 and $105.8m respectively.

Sector-wise, power sector attracted the highest $575.6m followed by communications $471.8m and electrical machinery at $143.4m during the period under review.

However, the highest outflow was seen in the communication sector with investors pulling out $106.1m, followed by $69.7 in personal services and $85.5m from the power sector during the period under review.

Total investment in to the country has been bolstered by the foreign investments in capital markets, however, with the recent outflows following the volatility due to coronavirus is likely to significantly reduce the final tally by the end of this fiscal year.

Published in Dawn, March 17th, 2020